Rachael Chadwick-Harrison, Chartered Accountant and Managing Director of the firm, has been speaking out to raise awareness within the local community.
“We’re still having conversations with people who have only just heard about MTD and are unsure whether it applies to them,” she said. “The reality is, a lot of people are going to be caught off guard.”
MTD will require affected sole traders and landlords to keep digital records and submit quarterly updates to HMRC, replacing the traditional annual tax return. While the changes are being positioned as a move towards efficiency, Rachael warns they will bring added pressure and cost for many.
“It might not technically be a tax increase, but it behaves like one,” she explained. “There are software costs, more admin, and more time needed to stay compliant. For small business owners already stretched for time, that’s a big shift.”
One of the most common misunderstandings, according to the firm, is what determines whether someone falls within the rules.
“People assume it’s based on profit, but it’s actually based on turnover,” said Rachael. “So even if you’re not making much money, you could still be required to comply.”
This is expected to hit landlords particularly hard, many of whom are currently dealing with rising interest rates and tighter margins.
Chadwick Accountants say they are also seeing an increase in business owners considering switching to a limited company structure to avoid the new requirements, although they stress this is not always the right solution.
“Going limited can work for some, but it’s not an escape button,” Rachael added. “It comes with its own responsibilities and needs careful planning.”
With the rules set to expand to even more taxpayers over the coming years, the firm is encouraging anyone who may be affected to review their situation now.
“The worst position to be in is finding out too late,” said Rachael. “We want to make sure our local community is informed, prepared, and not facing unnecessary penalties simply because they didn’t know.”
Rachael and her team discuss the changes in more detail in their podcast, FFS, For Finance’s Sake, in the episode titled “MTD: What It Really Means for Sole Traders and Landlords.” The discussion forms part of the firm’s podcast, FFS, For Finance’s Sake, which aims to break down complex financial topics for business owners and is available on major streaming platforms.
Chadwick Accountants is advising business owners and landlords across Warwickshire to seek professional guidance and put the right systems in place ahead of the changes.
The firm is encouraging local business owners and landlords to review their position now or speak to a qualified adviser to avoid being caught out.
